BEEF TARIFFS CONFIRM WORST NO-DEAL FEARS

13 MARCH 2019

ICSA president Patrick Kent has said that the announcement on tariff rates by the British Government crystallises our worst fears of the impact of a no-deal Brexit on the Irish beef sector. “The beef farming sector is already in crisis, with prices back up to €200/ head year on year for certain categories of animal. In some cases, farmers have had delays in getting animals processed. This announcement will cause dismay and we cannot underestimate the potential devastation to beef farming.”

“The plans by the UK government outline tariffs on beef of 53% of the EU tariff rate for beef and 100% for sheepmeat. While the beef rate could have been even higher, the distinction is academic as it poses an immense barrier to continued beef exports to the UK. In the short term, we should expect that contracts already signed with UK supermarkets will be honoured but in this kind of scenario all bets are off.  In any event, it is certain that these tariffs will soon begin to cause calamity for our beef exports.”

“The rates imposed on sheep meat are actually much more punitive, presumably because the UK government has decided to protect their sheep farmers but our sheep farmers are not so dependent on the UK for exports.

There is some leeway provided by a tariff rate quota of approximately 125,000 tons for beef at 0% rate. In theory we could avail of some of this quota but it will be open to all other exporters of beef as well including South America.

It is notable that the tariffs will not apply to beef exported to Northern Ireland but it is unclear yet as to how this might pan out.”

In practice, this suggests that Irish beef which is subjected to the tariff will be about 40% dearer than currently and therefore most UK consumers would be deterred from buying it. UK supermarkets would then have to choose between vastly increased beef prices or buying less traceable, low standard beef from South America.

ENDS